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We do the same as @RatherBeGolfing and @Alan Kandel. Client sends us a check for the filing fee. We deposit the check, then use a POA and the firm credit card to make the submission. The thing that's a pain is that you want to have all the information for the 8950/8951 ready before you start the process, but you can no longer just fill the forms out in advance and submit them. I actually saved copies of the old Forms 8950 and 8951, converted them to fillable forms, and fill them out (in order to have a reminder for myself, not to submit to the IRS) before each VCP submission. And of course, this process will be even more cumbersome if they ever change what you have to submit online from what was required by the old forms.

I don't think you have parent-child attribution at all, assuming you're working under section 1563 or 414. An adult child is only treated as owning the parent's stock in a corporation where the adult child already owns (either directly or through another form of attribution other than adult child/parent attribution) more than 50% of the corporation. Assuming the son could only be attributed the parents' stock through the adult child/parent attribution rules, the son does not own directly, and is not deemed to own indirectly, any of Corporation A. The same rule would apply in reverse to determine the parents' ownership in Corporation B. If the only route to attribution is adult child/parent attribution, they are deemed to own 0% of Corporation B. So the ownership is: Corporation A, 100% parents; Corporation B, 100% son; no parent-child attribution; no overlapping ownership. See Treasury Regulation 1.1563-3(b)(6)(ii) and the example in (iv), particularly subsection (d) of the example. The same rule and example are found in 1.414(c)-4(b)(6). On the other hand, if the son is working for the parents' company, there may be some other type of attribution, but I don't think parent-child will get you there on its own.

That doesn't pass muster, Bob.

I believe you would just need to file an amended 5330. There is a section in the instructions for "Claim for Refund or Credit/Amended Return."

If you know the amount, I would talk to your IRA custodian about withdrawing that amount (with earnings) from your IRA as an excess IRA contribution. Let your IRA custodian know that a your prior retirement plan has determined that $X.XX that was deposited as rollover in 2020 was not eligible for rollover and you wish to withdraw the amount prior to April 15th to avoid excess IRA contribution penalties for 2020 and/or 2021. Probably put that in a saving account since you'll likely need to return it to the Plan. You'll want to tax to the IRS custodian such that they do not generate a 1099-R because if they due, the IRA will think you owe tax again on that amount in 2021. Next call the local branch of your Department of Labor and ask for their advice. You'll also want to check your 1099-R(s) carefully which you should be receiving shortly since the Plan needs to mail them to you by 1/31/2021 for 2020 withdrawals.

You certainly can establish a profit sharing plan and just exclude owners. You can, if you wish, make it a 401(k) plan so that your employees also have an opportunity to defer. Talk to a local TPA, who can guide through the best options. Yes, you can contribute to the SEP and withdraw, but there may be fees/loads for doing so. I do cringe when I hear things like "old unused Keogh plan." Does this plan have money in it? Have you kept it up to date with document amendments and restatements, etc.? Are you filing 5500 forms if applicable? I just mention this as an item you should be aware of, and make sure all is ok. Again, I recommend you speak to a local TPA. Your situation doesn't sound complicated.

There is no flexibility on SEP-IRA contributions; you can't waive your own share.

Yes, thanks - slip o' the fingers.

Yes, YES, YES! Not only does it make cases such as the one posed easy to handle, but we've had MD groups - anesthesia in particular, where the owners tend to be young - where cross-testing doesn't work. But we can max the owners, and give other HCEs (e.g. CRNAs or non-owner MDs) 3%, and give a staff member or two 13% or whatever, and all is good. I call it "Ageless" testing but haven't seen that term stick anywhere. I have to be honest and say I don't know what that means. I think it means that if an HCE gets less or nothing due to some formulaic application (maybe where the limitation is hard-coded) then it will be ok. It does NOT mean that you can take a pro-rata formula and arbitrarily say "but we're not including the owner."

If the plan permits you to give everyone except the owner 3% then you are fine. Saying that it is a pro-rata allocation except you are excluding the owner is a shortcut way of describing what is actually happening, which is - you are deciding to independently give each person 3%, except for the owner. You then general test on the basis of current contributions and no HCE is getting more than any NHCE on a percentage basis so you will pass the test. Of course the plan has to have each person in their own group or at least have the owner in a separate group in order to not give the owner a contribution.

The Form 5500 question asks: “Was there a failure to transmit to the plan any participant contributions within the time period described in 29 CFR 2150.3-102?” Under that rule, a participant contribution (or a participant loan repayment) is a plan’s asset no later than “the earliest date on which such contributions or participant loan repayments can reasonably be segregated from the employer’s general assets.” https://ecfr.federalregister.gov/current/title-29/subtitle-B/chapter-XXV/subchapter-B/part-2510/section-2510.3-102 One might answer the Form 5500 question by interpreting the nebulous phrase “transmit to the plan” to focus on when the money left the employer’s control and was under the control of the plan’s trustee or its agent. (Was the TPA the employer’s agent, or the trustee’s agent? Or if the TPA was an agent of both, what exactly were the TPA’s obligations in the situations you describe?) If the plan’s fiduciaries, including the administrator and the trustee, treated amounts paid to the TPA as plan assets, and the failures were that some amounts were not promptly credited to participants’ individual accounts, that might be a distinct breach. If it is, the breaching fiduciary might owe restoration. But it is not always and necessarily the same breach (and usually prohibited transaction) that calls for a Yes answer to the Form 5500 question quoted above.

You didn't ask, but this is almost purely a psychological issue - it feels better not to pay the surrender charge but the reality is that the higher expenses over the remaining surrender period are roughly equal to the surrender charges. 100% correct. The accumulated values are meaningless except in the case of death. Always use cash surrender value net of surrender charges.

I work in HR and have an account with the SSA for their Business Services Online service. There was a lot of paperwork to get access to it but once I did it made my life tremendously easier. We are decentralized and we do find typos in SSAs from time to time, not to mention the occasional fraudulent number. https://www.ssa.gov/bso/bsowelcome.htm A few years ago, I volunteered to help our health and welfare people with their ACA reporting when the IRS kicked out hundreds of our submissions, claiming that the SSNs were wrong. When I submitted the so-called "bad" SSNs to the SSA online they all came back as correct. IRS was clearly wrong and I would not rely on IRS-provided info.

The 6% limit only applies if the DB plan is exempt from PBGC coverage. If your business is a sole proprietorship (not a corporation) and you are not in the business of professional services, then you might not be exempt. If you are not exempt then you are probably past due on a 2020 PBGC premium, but you would be able to get the full 25% deduction on the profit sharing plan.

No. Receiving a lump sum equal to 100% of the maximum benefit uses up the maximum benefit. There is nothing left in the maximum to be paid as an annuity.

https://apps.irs.gov/app/picklist/list/priorFormPublication.html?value=1099-R&criteria=formNumber&submitSearch=Find You can also get to this link from the IRS's "About Form 1099-R" page by clicking the link for "All revisions for Form 1099-R and instructions"

I agree a 75/25 split would work, assuming no attribution (including options) or other application of the stock-exclusion rules. This could involve a review of the shareholder agreements, buy-sell agreements, etc. Also, unless the values of the two businesses are (and remain) identical, my guess is the owners will try to find some way to "equalize" the value of their ownership through something that may implicate one or more of the attribution/exclusion rules. Controlled group ownership can be premised on the voting power or the value of the stock owned, so changing voting share ownership to 75/25 may not break up the controlled group if there are different classes of shares that give the owners a closer-to-50/50 economic split.

I am not aware of any "reasonableness" requirement on the definition of compensation for deferral election (not testing) purposes. The plan can generally place a maximum limit on the amount of compensation that can be deferred so I don't see any issue with carving out certain pieces of compensation for deferral election purposes. However, see 1.401(k)-1(a)(4)(iv)(B) for rules regarding nondiscriminatory availability of benefits, rights and features that can be an issue when using an alternative definition of compensation.